How Shared Labor Can Help Optimize Your Staffing Model

With retail’s Q4 upon us and the holiday season surging into focus this week with Thanksgiving & Black Friday, retailers across the United States are gearing up for their biggest three months of the year.

Most of the headlines heading into the holidays have been about just how hot the market is.

📉 Record low unemployment is at 3.7%
💪🏽 The hiring rate is at 3.9%
🔥 The U.S. Economy continues to add jobs
🚀 Right now, there’s 7.1 Million job openings.

🤔 Labor Shortage Reveals Hiring Pain Points

The truth is, it’s really never been harder to hire an employee.

Throughout this labor shortage it's never been harder for employers to find hourly talent especially during the holiday season. This is compounded with the fact that we continue to hear from the Fortune 1000 that employee turnover continues to remain high. There's upwards of 100 percent annual turnover.

Not only is it hard to hire, it is even harder to retain.

We unpacked some other details from the latest jobs report and one of the most shocking numbers was that 2.4% of employed American workers had voluntarily quit their job this year. The last time the quit rate was that high -- April, 2001.

The United States now has more than one job opening for every unemployed person, a dramatic turnaround from the Great Recession, when there were more than six unemployed people for every job on offer, the Labor Department said. Unemployment was at 3.7 percent in September, the lowest level since 1969.

⏰ Employees Craving More Hours

Employees want more hours, but shift coverage rates are low.

At Branch, we have the benefit of being highly connected to the hourly employees -- the end-users of our platform.

When we talk to these employees, the consistent message we hear from them is this: Employees simply want more hours and more money.

Hourly employees are either looking for more hours, or an additional job to supplement their income.

But, what’s so interesting about that, is that these same companies, are also seeing open shift coverage rates as low as 15%. In the context of retail, what that means is that there are opportunities for additional shifts that simply go uncovered by employees in a store.

There’s a huge disconnect here because on one hand, employees want more hours, but on the other, they’re not picking up additional shifts.

This problem becomes amplified for retailers this time of year, which is why we are hearing so much about it.

⌛Currently Available Solutions

Companies are doing a few different things to increase their staffing levels right now.

First is what you see in the news -- companies are doing everything they can to hire more employees such as increasing wages, offering bonus, or other employee incentives like employee discounts. This obviously comes at a huge cost to the employer on top of the cost to hire an employee which is around $2,000 when you factor in recruiting, training, and onboarding costs.

One of the things we’ve seen anecdotally, is that it’s become more common for managers to reach out to other managers in their district, by phone or email, and asking for staffing help by borrowing labor from other stores in the area.

The problem is the current methods of calling or texting other managers is really not scalable enough to make a real impact, and most of their current WFM systems they are using are not built for cross-location functionality.

This led us to dig into how we can help companies not necessarily hire more people but better utilize their employees by pooling labor across company locations.

Why hire 5,000 hourly employees when you have already have 20,000 in a geographic area that you’ve already trained and more than willing to pick up more hours?

🔍 Our discovery: Power of Nearby Locations

Here's what we know from low coverage rates: At a single location there are limited personnel options for meeting demand. Even if employees want more hours, they are often unable to pick up shifts at the last minute due to personal conflicts.

But, if we increase the employee pool by five times the amount by considering all of the locations within a geographic area, say a five-mile radius, the pool of employees grows and therefore significantly increases the chances that a shift gets covered.

These results continue to improve as we expand to the radius to 10 miles radius, to 15 miles and beyond.

Not only does this new approach increase shift coverage rates, but it fulfills employees needs for flexibility and more cash.

💪🏽 Introducing: Shift Flexibility

We’ve built an end-to-end solution that helps companies scale labor in real-time, and it does so by allowing managers to post open shifts, or employees to offer shifts to other employees that are qualified to pick up the shifts in nearby company locations.

These shifts can be posted on Branch using either our mobile or desktop application.

After the shift is broadcast by another employee or manager nearby, the employees that are qualified immediately receive a notification on their Branch mobile app and are able to view shift details and how far the store is from their home store.

From there it is as simply as making one tap to cover, and it gets routed to the appropriate managers for approval.

📊 Highly Configurable

We work with enterprise leaders to make sure location hierarchy is configured to their needs. The hierarchy of locations where these shifts can broadcast can be segmented by region, district, or by a certain mile radius.

This is in place to ensure that employees or managers broadcast to only the locations their companies have authorized, and prevents shifts from crossing state lines or violating other scheduling policies.

For companies with previous solutions, this integration allows us to send information back and forth to their WFM system. This allows us to also communicate important information like schedule changes, mileage data, and job transfer codes.

🏛 Compliance

We keep hearing about the importance of compliance as new legislation around scheduling and shift coverage pops up. Places like: New York and Seattle to name a few.

Branch comes equipped with a robust rules engine. We can set limits and controls from the beginning based on scheduling compliance by geographic area. These are enforced through geo-fencing and hard or soft alerts on the application. We’ve actually deployed Branch specifically for enterprises in the geographic areas like Seattle that are experiencing scheduling compliance legislation.

📲 User profile data

For some stores, there may be questions about quickly sharing and onboarding labor who managers have never vetted.

For Branch, it’s not a problem, since we provide visibility by allowing a manager to see a profile of who the employee is before approving coverage such as skills, certifications and reviews or ratings from other managers.

We’ve also put some checks in place to make sure that everyone is aware of the changes. Managers at both locations approve of the shift coverage, and have visibility into coverage. That means a manager in 'Location A' approves as well as the manager in 'Location B' all from the mobile or web application.

We strongly believe this is an important part of labor sharing moving forward. One of the biggest hesitation with third-party staffing is that employers are skeptical of the workers that they are taking on.

Important Factors To Consider

The shared labor you utilize are all employees that have been hired and trained by the company that are simply working at another location.

It's decreasing the amount of time managers are spending reaching out to find employees to cover or filling the gaps themselves. We’re seeing a decrease in the amount of time it takes a shift to get covered by 35%.

In addition to a decrease in the amount of time it takes to get a shift covered, across the board, we’re also seeing 60 percent increase in shift coverage rates.

With more opportunities for coverage, the amount of hours worked by employees have also increased which means employees are happier getting the hours they want. As a result, we’re seeing this lead to a 13% annual decrease in employee turnover.

🤝 Branch For All Industries

Hourly employees cover almost every type of job, industry and vertical.

Right now, we're working with a variety of companies, but all have nation-wide reach. These companies come from a variety of industries: retail, restaurants, warehousing, or banks. Really, anywhere with a large pool of hourly employees are concentrated in geographic regions.

Retail likes to think ahead. Even though we’re in the midst of another holiday shopping season, it’s never too early to think about how to share labor across your locations.

One of our strengths is that an enterprise can get up and running within a week using our product. Our goal at Branch has always been to remove friction for not only the end-user, but for the enterprises to deploy our technology. Usually these companies get started with shift flexibility in high-density, high-demand areas and see these amazing results first-hand before rolling out to the broader company network.

It’s never been easier for an employee to find a job which makes the challenge of acquiring labor harder in the short-term.

We think the main way labor-sharing can help retailers for the holidays is this: with the hourly labor shortage and the massive influx in holiday hiring, it is vital to maximize headcount and employee effectiveness. Filling open shifts (which is the goal of holiday hiring) is boosted through sharing labor across locations.